If you're 35 or older, the financial crisis may seem to have no upside. Your retirement funds, home equity, job prospects and credit lines have withered so much that it's hard to focus on anything but what you've lost.

If you're young, though, the biggest threat to your future financial security isn't the current crisis. Your greatest risk is that fear will cause you to miss some once-in-a-lifetime opportunities.

Consider:

Houses are on sale. Home prices are down 27% from their July 2006 peaks, according to the S&P/Case-Shiller Home Price Indices, and values have fallen more than 40% in some areas. That's a bummer for current homeowners but a boon for those just starting out who can now afford better homes and neighborhoods than they could have just a few years ago.

Could home prices drop further? Of course they could, and they probably will, because the foreclosure crisis is far from over. But right now:

Interest rates are still near generational lows but are likely to shoot up once the recovery begins.

The Internal Revenue Service will give you an $8,000 tax credit if you buy before Dec. 1.

You shouldn't buy if you can't stay put for at least five years. And you should read "3 bad reasons to buy a home." But if you're where you want to live and can afford the costs, there may never be a better time to buy.

Stocks are on sale. Yeah, yeah, you've heard this before -- and heard it discounted by pundits who measure "long term" in weeks or months. So let's be clear: You've got at least 30 years until retirement, and an investment in stocks, as measured by the benchmark Standard & Poor's 500 Index, has never lost money in any 30-year period. Far from it. Even those who invested before and during the Great Depression, when stock indexes plunged by up to 90%, eventually came out ahead:

30-year period

Average annual return*

30-year period

Average annual return

1928-1958

8.47%

1935-1965

12.00%

1929-1959

9.20%

1936-1966

10.53%

1930-1960

10.27%

1937-1967

12.93%

1931-1961

13.27%

1938-1968

12.31%

1932-1962

13.25%

1939-1969

11.99%

1933-1963

12.40%

1940-1970

12.53%

1934-1964

13.03%

*As measured by the S&P 500 Index at year-end

Source: T. Rowe Price

Here's another way to look at it: Much has been made of the fact that the S&P 500 has fallen more than 50% from its peak, to under 800. Thirty years ago, the S&P was under 100.

Could stock prices fall more? Of course they could.

But to think stocks will never recover is kind of ridiculous. Yes, there are some doomsayers who are predicting the end of the financial world, with a complete worldwide collapse. But there have always been folks forecasting financial apocalypse, and they've always been wrong.

What's really going on is the flip side of the bubble. As human beings, we erroneously think that whatever happened recently will continue indefinitely. In good times, we decide that dot-com and real-estate prices can only go up. In bad times, we make the same mistake in the opposite direction.

What you shouldn't do is sit on the sidelines until it's "safe" to get back into the market. By the time the economy is clearly in recovery mode, the market will have made big gains, and you'll have missed out.

Credit is tight. How the heck is that a blessing? Unlike your unwise elders, you won't be able to borrow your way into trouble, at least for a while. You may actually learn to live within your means.

That's a big reversal from a couple of years ago, when lenders were pelting virtually everyone with credit cards, auto loans and outsized mortgages. Today the pendulum has swung so far in the other direction that you really need your financial ducks in a row to get a loan. (Read "Need a loan? Borrow like it's 1975" for details.)

The good news: Everybody's cutting back these days, and the national savings rate has jumped to 5%, so you won't stand out if you're careful with your money.

Where to start

That means it's a great time to:

Get in the habit of saving. A financial cushion is essential now that you can't just borrow your way out of a jam. Read "Why you need $500 in the bank" for starters. If you're saving for a home, shoot for at least a 10% down payment plus three months' worth of mortgage payments before you buy. ("The end of the 0% down payment" tells you more about why.) Want to buy a car? A 20% down payment is good -- 50% is even better -- because plunging resale values can leave you "upside-down" if you pay less ("What a car wreck could cost you" has details). Really smart folks pay cash for their cars and drive them until the wheels fall off. Owning your cars for 10 years instead of five can save you more than a quarter-million bucks over your lifetime.

Pay your credit card balances in full. This was always the best way, but it's crucial now that issuers are slashing limits and raising rates with little or no justification. If you don't charge more than you can pay off when the bill comes, you won't be at the mercy of mercenary lenders. This one habit can make a world of difference in your financial life, leaving you richer and at far less risk of bankruptcy.